Nippon Steel and US Steel sue Biden administration over blocked merger

U.S. Steel and Japanese steelmaker Nippon Steel sued the U.S. government Monday in a last-ditch effort to move forward with their merger, which President Biden blocked Friday over national security concerns.

The new lawsuit accuses Biden of interfering in the merger review process for political gain and to curry favor with the United Steelworkers Union (USW).

The companies in a separate lawsuit on Monday alleged the USW illegally colluded with steelmaker Cleveland-Cliffs, which previously tried to purchase U.S. Steel, to undermine the proposed deal.

“We did everything right as a company with Nippon. We did everything right. The government failed us. They failed because they didn’t follow the process, and we are going to right that wrong. They failed our workers. They failed our communities. They failed our country. They failed our best ally in Asia, and they have embolden China by not following the rule of law,” U.S. Steel President and CEO David Burritt told Fox Business Network’s Lydia Hu on Monday.

“And so, just like with legal issues, we’ve seen corruption, and we’re going to say something loudly, and we’re going to do something with litigation to right this wrong so that our workers and our communities and our country will benefit,” he later added.

Cleveland-Cliffs President and CEO Lourenco Goncalves called the lawsuit “a shameless effort to scapegoat others for U.S. Steel’s and Nippon Steel’s self-inflicted disaster.”

“Nippon Steel and U.S. Steel continue to play the blame game in a desperate attempt to distract from their own failures,” Goncalves said in a statement.

USW International President David McCall said in a statement to The Hill on Monday that the union is reviewing the complaint and “will vigorously defend against these baseless allegations.”

“By blocking Nippon Steel’s attempt to acquire U.S. Steel, the Biden administration protected vital U.S. interests, safeguarded our national security and helped preserve a domestic steel industry that underpins our country’s critical supply chains,” McCall said.

The Hill has contacted the White House for comment.

Biden said late last week that his decision to block foreign ownership of a “vital American company” was a matter of national security.

“It is my solemn responsibility as president to ensure that, now and long into the future, America has a strong domestically owned and operated steel industry that can continue to power our national sources of strength at home and abroad,” Biden said in a statement.

Lawmakers on both sides of the aisle and President-elect Trump also opposed the merger.

“Why would they want to sell U.S. Steel now when Tariffs will make it a much more profitable and valuable company?” Trump said in a post on his social media platform Truth Social. “Wouldn’t it be nice to have U.S. Steel, once the greatest company in the World, lead the charge toward greatness again? It can all happen very quickly!”

Labor groups celebrated the Biden administration’s decision to block the proposed deal, which was sharply criticized by many in big business.

“From the outset of the process, both Nippon Steel and U. S. Steel have engaged in good faith with all parties to underscore how the Transaction will enhance, not threaten, United States national security, including by revitalizing communities that rely on American steel, bolstering the American steel supply chain, and strengthening America’s domestic steel industry against the threat from China,” U.S. Steel and Nippon Steel said Monday in a joint statement on the litigation.

Updated at 3:43 p.m. EST.